Detailed Guide On Points You Must Know Before Converting Salary Account To Savings Account

A salary account is linked to your employer’s account, which means that your salary is automatically credited to your account each month. This saves you the hassle of having to transfer your salary from another account or manually depositing it. In this article, we are going to learn about things to consider while converting a salary account to saving account.

Important Points on Converting your salary account to saving account

You can opt for converting your existing salary account to a savings account when you switch your job. This may involve filling out an application form and providing the necessary documentation. However, before converting your salary account to saving account, it is important to consider a few points to know whether a savings account is the right fit for you. Here are some points you should consider before converting your salary account to saving account:

Employees should do enough research before converting their salary account to saving account.

1.  Interest rate

Savings accounts usually offer a lower interest rate compared to salary accounts. Make sure you are comfortable with the interest rate being offered on the savings account before making the switch.

2.  Fees and charges

After your salary account is converted to a savings account, you may be charged fees for certain services that were previously free. Some banks may charge fees for services such as ATM usage, account maintenance, or online banking. Hence, it is important to be aware of these fees so that you can plan your finances accordingly. Also, you should compare the fees and charges of different banks and choose one that offers a favorable fee structure.

3.  Transaction limits

Savings accounts generally have lower transaction limits compared to salary accounts. Make sure the transaction limits on the savings account are sufficient for your needs before converting your salary account to a savings account.

4.  Overdraft facility

Salary accounts may offer an overdraft facility, which allows you to borrow money from the bank up to a certain limit. This may not be available with a savings account, so consider whether this is a feature you will miss if you switch.

5.  Eligibility for offers and discounts

Salary accounts may offer certain benefits and discounts, such as free insurance or discounted rates on loans. Make sure you are not losing out on any such benefits by switching to a savings account.

6.  Credit score

Your credit score may be affected if you switch from a salary account to saving account. This is because salary accounts may be seen as more stable and reliable, whereas savings accounts may be seen as less reliable.

7.  Convenience

Consider whether the savings account is more convenient for you in terms of access to ATMs and branches, online banking, and other features. It is also important to consider the convenience and accessibility of online and mobile banking when choosing a savings account. Many banks offer online and mobile banking services that allow you to manage your account, make payments, and transfer funds from your phone or computer. Make sure to choose a bank that offers a user-friendly and convenient mobile banking experience.

8.  Check the terms and conditions of your salary account

It is important to understand the terms and conditions of your salary account before it is converted to a savings account. This will help you understand the benefits that you may lose and the changes that you may need to make to your account.

Converting a salary account to saving account is a preferable option for those who have switched their job.

9.  Consider your banking needs

Think about your banking needs and whether a savings account is the right fit for you. So, it is always a good idea to compare different bank accounts and their features before making a decision. Look for accounts that offer competitive interest rates, low fees, and a range of features that meet your needs.

10.              Set up automatic payments

If you have recurring payments such as utility bills or credit card bills, it is a good idea to set up automatic payments in your savings account to ensure that they are paid on time. This will help you avoid late payment fees and maintain a good credit score.

11.              Minimum balance requirements

You should consider the minimum balance requirements of your savings account. Some banks may require you to maintain a minimum balance in your account in order to avoid fees or charges. Hence, it is important to understand these requirements and ensure that you are able to meet them.

12.              Location of the branch

Not an important point, it will be good to consider the location of the bank’s branches and ATMs when you are converting a salary account to saving account. If you frequently need to visit a branch or use an ATM, it may be more convenient to choose a bank that has a branch or ATM located near you.

Many banks have a network of branches and ATMs that you can use, and some banks may offer additional services at their branches, such as investment advice or financial planning. Make sure to research the locations of the bank’s branches and ATMs before making a decision to ensure that you will have easy access to these services. In case you prefer to do most of your banking online or through your mobile phone, the location of the bank’s branches may not be as important. In this case, you can focus on other factors such as the fees, charges, and interest rates offered by the bank.

13.              Change your communication address

It is important to update your communication address when you convert your salary account to saving account to ensure that you continue to receive important information about your account. This includes monthly statements, credit and debit card bills, and other sensitive information such as internet banking and mobile banking passwords, debit and credit card PINs, and checkbook.

Conclusion

Converting a salary account to saving account can be a useful option when you change jobs or no longer receive a salary through that account. However, it is important to carefully consider your requirements and a few points before converting a salary account to saving account.